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If Apple Jumped Off a Bridge, Would Microsoft Jump, Too?

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EVERYWARE IS EVERYWHERE
DailyFeed

One of the reasons Apple (AAPL) products tend to work so well is because Cupertino controls every aspect of production. Since software and hardware are designed in-house, and in tandem, the Macbooks, iPads, and iPhones they create tend to work better than competing products. Vertical integration -- from purchasing chip makers to selling products in exclusively branded stores -- has assured a refined, oft-imitated quality and cemented a remarkable brand identity.
 
So, of course Microsoft (MSFT) is trying to copy the model. Would you expect anything less?

Buzzfeed calls the discernable shift in the tech industry Everyware. It’s the idea that in order for a software company to truly remain competitive, it must bring hardware production in-house. Since 1975, Microsoft has made few waves in the computer hardware sector, save for a few branded mice and keyboards here and there. Microsoft has survived as long as it has by selling software to hardware makers like Hewlett-Packard Company (HPQ), Dell (DELL), Lenovo Group Limited (LNVGY), and the privately held Samsung, who in turn deliver it installed on their products to consumers.
 
One reason this model worked so well for so long is because Windows held over 90% market share for nearly two decades, until last year when Mac OS X started to account for a larger share of the market. Don’t forget, however, that while Apple seems to be everywhere, Microsoft Windows still stakes claim to an 89.7% versus Mac OS’s 5.25%.
 
Still, Microsoft sees Apple as a threat, and bolstered by the success of its Xbox 360 -- designed and built from the ground up completely in-house -- it took the same approach with its recently announced Surface tablet. While it’s debatable whether or not the new tablet will be able to hold its weight in the iPad market, it shows initiative on Microsoft’s part.
 
Or, simply Microsoft is copying Apple’s wildly successful strategies, which is not a stupid idea.
 
Taking another cue from Apple, Microsoft has 26 planned-or-existing retail spaces, which appear to be strikingly similar to Apple Stores in both aesthetics and operation.

Even Google (GOOG) is guilty of the Everyware trend. The search engine giant not only designed the original Nexus phone, but works very closely in the Android OS device’s manufacturing process.
 
In-house hardware development might mean more buyouts like Apple’s acquisition of P.A. Semi, a microprocessor design firm, in 2008. And maybe there will be a day -- a long, long time in the future, say, a year and half -- when the thought of purchasing a computer or piece of hardware from Microsoft, Google, and, of course, Apple that wasn’t designed and built in-house will be ludicrous.

(See Also: Microsoft Surface Will Have an Imperfect Launch and Microsoft Fails at the Worst Possible Time)
POSITION:  No positions in stocks mentioned.

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